What Are the Different Types of Stock Trading?

By Sofia Thai
Edited by Taj Schlebusch

Published April 23, 2021.

What Are the Different Types of Stock Trading? main image

Stock trading has become hugely popular, with online brokers and exchanges making it far more accessible for the general public. There are many different types of stock trading available, so in this article, we will discuss some of the approaches to equities.


This term refers to the shortest term form of trading, in which traders enter a position, sometimes for mere seconds. Scalping is based on taking advantage of tiny movements in intraday prices. At an institutional level, scalping is often conducted by high-frequency traders.

Day Trading

Day trading has been a focus on the stock market activity for many decades, and its dramatic nature tends to attract attention. If you see stock market activity in a Hollywood film, you can bet your bottom dollar that it centers around day trading.

As its name suggests, day trading involves trading stock and equities over a 24-hour period, with the intention of taking advantage of short-term information and insight. Day traders frequently rely on small gains in order to build profit, but base their decisions on fundamentals, rather than scalping.

Swing trading

Swing traders typically hold positions for several days, although investments can even drag on for weeks in this category. Consequently, swing trading is less focused on short-term trends than day trading, but it is still a strategy that is implemented by institutional investors.

Those engaging in swing trading rely on techniques such as trend trading, counter-trend trading, momentum, and breakout trading. Swing trading often appeals to amateurs because it doesn't rely on continual monitoring of the stock market.

Position trading

Finally, position trading is focused on long-term price movements, without investors in this strategy effectively investing their belief in a particular stock or equity. Position training can go on for many years and is thus not focused on trivial fluctuations.